Halo Top melts market share away from Unilever

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Dive Brief:

Unilever, which makes Ben & Jerry's as well as Breyers, has lost 1.5 share points to upstart success Halo Top, according to a recent article in Food Business News. Hurricanes in Texas and Florida also are blamed for the 6.7% drop in net sales in the company’s refreshment segment.

Unilever has responded quickly with the introduction of seven flavors of Breyer’s Delights, a low-calorie, low-sugar, high-protein ice cream. The launch of Magnum pints has performed well since its launch less than a year ago, helping the brand post growth of nearly 15%, the publication reported.

“In ice cream, we’ve grown strongly over the past two years, helped by our innovations behind brands like Magnum and Ben & Jerry’s and two good summers in Europe,” said Graeme Pitkethly, chief financial officer and executive director of Unilever. “This year, we had poorer weather in August and September, leading to lower sales.”

Dive Insight:

When Halo Top scooped the competition to become the #1 selling pint of ice cream in the U.S. this past summer, industry experts knew they were taking away market share from dessert giant Unilever. It's no surprise given the rapid growth and wide-spread popularity of the upstart brand.

Founded in 2012, Halo Top made a name for itself as a low-calorie, high-protein and low-sugar treat. The newcomer to the ice cream space met the demand for healthy, simple and clean food. It has taken advantage of the shoppers' interest in eating better by crafting a good tasting ice cream that also addresses their demand for transparency — the calorie count is posted right on the front of the container. The company sold more than 17 million pints in 2016, a 2,500% increase in sales.

Unilever’s launch closely mimics that of its rival, which may make consumers see it as a knockoff product. However, that sin could be forgiven by its cheaper price. One pint of Breyers delights sells for $4.29 at Harris Teeter, for example, compared to Halo Top’s $5.49.

If Unilever’s new brand flounders, it may need to consider taking another page from Halo Top's playbook and boost its social media presence. Much of Halo Top’s power comes from its cult status on Instagram — the #HaloTop hashtag has been used more than 100,000 times, and the company's account has 470,000 followers to date. This move could help Breyers delights win back some market share, but it would likely not be enough to overtake Halo Top.

Ice cream has not been the only space where well-established brands have run into problems. Popular Greek yogurt brand Chobani has had similar success as an upstart, overtaking General Mills' Yoplait, the segment's long-established leader, to become the U.S.'s largest yogurt brand in 2016. Chobani grew into a $1 billion juggernaut just five years after coming onto the market.

Unilever, General Mills and Nestle — all companies that have ice cream brands — would be logical buyers. If Unilever wins the bid and takes over Halo Top, it would help drastically improve its ice cream division. If the company loses out, it’s competition with the popular brand will only increase as Halo Top would then have deeper pockets and a broader marketing arm to help it expand.